Deutsche Pfandbriefbank will price its fourth euro benchmark covered bond of the year today (Wednesday), a Eu500m five year deal that was launched a day after the issuer completed a restructuring of its cover pools and extends the market’s positive reopening.

The restructuring of the Deutsche Pfandbriefbank (pbb) cover pools was due to a transfer of mortgage loans from the issuer to FMS Wertmanagement, the wind-down institution from which pbb is aiming to separate ahead of targeted reprivatisation in 2015. The transfer involved assets that were in pbb’s mortgage Pfandbrief cover pool, and was compensated for by a transfer of assets from the public sector Pfandbrief pool to the mortgage pool. FMS Wertmanagement has granted an acknowledgement of debt to pbb that will be included in the public sector Pfandbrief cover pool. (See here for previous coverage of the restructuring.)

A spokesperson for pbb said that the restructuring was completed yesterday (Tuesday), which meant that the issuer could go ahead with a deal today.

Pbb’s move comes after a strong transaction for Nordea Bank Finland yesterday, with the positive outcome of that trade and senior unsecured deals at the beginning of the week spurring borrowers to take advantage of good conditions for new issuance.

FIG supply so far this week is showing that despite weaker equities and some selling in the secondary market the primary market is in good shape, according to syndicate bankers.

“You have to separate the secondary market and the primary market,” said one. “Senior spreads were widening on Monday but Svenska got a great deal done.”

Syndicate bankers are expecting further benchmark covered bond supply to hit the market this week, although any moves are said to be on hold pending release of Federal Open Market Committee (FOMC) minutes today.

Issuers such as Erste Bank and Italy’s UniCredit have been mentioned as potential new issue candidates, while German issuers are also said to be eying the market, and some syndicate officials believe Spanish borrowers should launch deals to take advantage of tighter spreads.

“The Spanish should definitely do something,” said one. “Even if they have to pay a discernible new issue premium spreads are quite attractive.”

Peripheral government bonds widened some 10bp yesterday, but the syndicate official said that “a bit of a pullback after a super strong rally is normal”.

Pbb leads Danske Bank, DZ Bank, Goldman Sachs, NordLB and UniCredit priced the mortgage Pfandbrief, which was capped at Eu500m from the outset, at 9bp over mid-swaps, achieving what a lead syndicate banker said was a goal of single digit pricing.

“And the deal was a no-grow, so all goals were achieved,” he said. “It was a successful transaction.”

Some Eu900m of orders were placed for the deal, which was initially marketed at the low 10s over and then the 10bp over area.

Syndicate bankers away from the leads agreed that it was a successful deal, saying that Eu900m of orders was a “solid” level of demand. One said that at 9bp over the deal was offering a small new issue premium, of 1bp.

Pbb has been an active covered bond issuer this year, noting in an announcement about its half year results that Pfandbrief issuance accounted for around 60% of the bank’s aggregate long term funding of Eu5bn in the first half of this year. Today’s deal is pbb’s fourth euro benchmark covered bond this year, following two mortgage Pfandbriefe and a 15 year public sector Pfandbrief.